Dan Wang

Yeah, you know, if you're a pension or you're a university endowment, do you really want to hold this?

And then the U.S.

government treasury comes asking, what are you doing?

Equilibrium is a really important concept here because it implies that no state really feels the need to shift in a big way.

I think the scary thing might be that something upsets the equilibrium where one country feels under threat in some way.

First, I think I only partially agree with you that the US feels very self-sufficient at the moment.

You're right by a lot of simple conventional measures.

Imports are something like 12% of US GDP and it's not a huge amount.

But in a crisis, it turns out that the US actually really needs something like this 12%.

I think a lot about the early days of COVID, which speaks to another difference between China as well as America.

In the early days of COVID, the US struggled to produce anything as simple as masks and cotton swabs.

I was living in China, and one of the most destructive little moments I remember was going up to a factory manager around Shanghai.

And this factory manager marveled to me that American manufacturers didn't get their act together to produce really important goods.

And in this Chinese guy's formulation, too many of these American companies asked themselves,

whether making masks and cotton swabs is part of their core competence.

And for very few companies, that's where their core competence, and then they don't make it.

Chinese companies say that making money is their core competence, therefore they go make what the market demands, which then was masks and cotton swabs.

And so I was grabbing masks made by Foxconn, which normally makes iPhones.

And by JD.com, which is one of China's biggest e-commerce retailers, they just decided to retool a lot of their factory lines to produce these things that the market needed.

Then there was some complacency and lack of hustle among American manufacturers to actually produce these sort of things.